For most couples the family home is the largest thing they own, and the one with the most feeling attached to it. So it’s usually the first question we’re asked after a separation: who gets the house? The honest answer is that there’s no rule. There is, though, a well-worn way of working it out.
How property is divided
Under the Family Law Act, a settlement looks at the whole picture, not the house alone. In broad terms, the process asks:
what you each own and owe, together and separately, including super;
what each of you contributed, financially and otherwise, including caring for children and running the home;
what each of you will need in future, considering things like health, income and care of children;
whether the result is fair to both of you.
The house is one item on that list. Whoever keeps it usually gives up other assets, or pays the other person out, so the overall division is fair.
The three usual outcomes
In practice, most couples end up with one of three results. One person keeps the house and refinances the mortgage into their own name, paying the other their share. The house is sold and the proceeds divided. Or, less often and usually because of children, both keep owning it for a set time before it’s sold.
Which one works depends mostly on whether the person who wants to stay can borrow enough on their own. Get a realistic answer from a lender early. It saves a lot of hopeful negotiating.
Agree on a value
If you can’t agree what the house is worth, a single valuer chosen by both of you is cheaper and quicker than two competing ones. An agent’s appraisal is a useful starting point, but it isn’t a valuation.
Living arrangements don’t decide ownership
Moving out doesn’t mean giving up your share of the house, and staying doesn’t give you a larger one. Keep paying your part of the mortgage and outgoings if you can, and keep a record of what you pay. Payments made after separation can be taken into account.
Mistakes that make it harder
The common ones are signing a quick handwritten agreement, stopping the mortgage payments to make a point, and changing the locks on a house you both still own. Any of these can cost you money or credibility later. An agreement about property only binds you when it’s made as consent orders or a properly prepared financial agreement.
Getting it right
Tom and Ella will ask for your list of assets, a recent valuation or appraisal of the house and a note from a lender about refinancing. With those, we can usually tell you the likely range of outcomes at the first meeting, and what it would take to get there without going to court.
